Figure 8-3
-In Figure 8-3,the three curves are:
A)(1)is long-run aggregate supply, (2)is short-run aggregate supply,and (3)is aggregate demand.
B)(1)is aggregate demand, (2)is short-run aggregate supply,and (3)is long-run aggregate supply.
C)(1)is short-run aggregate supply, (2)is long-run aggregate supply,and (3)is aggregate demand.
D)(1)is long-run aggregate supply, (2)is aggregate demand,and (3)is short-run aggregate supply.

Question

Figure 8-3 
-In Figure 8-3,the three curves are:
A)(1)is long-run aggregate supply, (2)is short-run aggregate supply,and (3)is aggregate demand. 
B)(1)is aggregate demand, (2)is short-run aggregate supply,and (3)is long-run aggregate supply. 
C)(1)is short-run aggregate supply, (2)is long-run aggregate supply,and (3)is aggregate demand. 
D)(1)is long-run aggregate supply, (2)is aggregate demand,and (3)is short-run aggregate supply.

Quizplus · Accepted Answer

In typical macroeconomic models, the long-run aggregate supply (LRAS) curve is vertical, reflecting the economy's potential output independent of price level. The short-run aggregate supply (SRAS) curve slopes upwards, indicating that higher prices can lead to higher output in the short term. The aggregate demand (AD) curve slopes downwards, showing that lower prices increase the quantity of goods and services demanded. Choice A correctly identifies these characteristics.

Figure 8-3 -In Figure 8-3,the Three Curves Are